In the modern world, the cities are the concentration place of all types of people’s activity – economic, political, social, and cultural. Such metropolises as New York City, having millions and millions of citizens, businesses and other organizations condensed in them – become the flagmen of the national development. The fact that urban life is dramatically important in the modern world has drawn much attention of different scientists and researchers to the problems of the city. One of such researchers is Paul Peterson, well known for his urban policy theories described in his books City Limits (1981), and Between Citizen and City (1986).
In the City Limits Peterson puts forward the idea that politics plays an insignificant role in urban fiscal policymaking. The researcher’s main thesis is that municipal officials should pursue the interests of the city as a whole, but not the interests of the individual citizens summed. According to Peterson, “…political leaders can give reasoned attention to the longer range interests of the city, taken as a whole. Just as local policy is limited by the interests of cities, so political processes at the local level are limited.” For example, Peterson states that the cities should not provide social services to low income citizens and pensioners, take care of criminality rates, etc., since it will erode fiscal competitiveness of the municipality due to high taxes. Peterson argues that inefficiencies of the social service “will be borne by the residents till the cost of inefficiency exceed the cost of moving”
As for urban fiscal policy, Peterson claims that internal political processes of the cities do not really matter in the determination of it. According to his theory, increased taxes and munificent social programs make taxpayers and firms relocate to neighboring towns. Consequentially, cities must design budget and tax policies with consideration of the inter-city competition — especially, the municipalities in the neighboring metropolitan area.
However, in the recent political events and processes in New York City headed by its mayor Michael M. Bloomberg, one can find facts that question the consistency of Peterson’s “city limits” theory. The recent New York Times publication, “Taking Credit for Rebound That Remade City Economy” by Jennifer Steinhauser, investigates the Bloomberg’s policy, which is controversial to the views of Paul Peterson.
Michael Bloomberg spends much effort on the social service for the people and the infra-structure of the city. For instance, Bloomberg promoted the development of the social service as he furthered a Californean real estate firm to “erect a $700 million complex of commercial health care laboratories on the campus of Bellevue Hospital Center” and paid much attention to the construction of a new City Stadium. Bloomberg also took care of middle- and small business development, while contributing to the advancement of Economic Development Corporation of NYC. Bloomberg increased the taxes, while making the city budget apportion more money for pension and social care, solving the problem of criminality, developing tourism, improving infrastructure, etc.
Blommberg’s policy was particularly successful and aiding, when the NYC municipalities faced the crisis that followed after the terror of September 11th. As a case, Bloomberg, devoted much of his influence to keeping companies from leaving New York after Sept. 11. The article tells about similar examples.
The social-oriented urban policy of Michael Bloomberg, which brought the city out of crisis towards successful development and well-being, proves that Paul Peterson’s theory needs to be revisited and calls for further empirical tests of validity.
Paul Peterson, “City Limits”, University of Chicago Press, 1981
Jennifer Steinhauser, “Taking Credit for Rebound That Remade City Economy”, New York Times, Oct. 9, 2005
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